A broker submits an application for homeowners insurance to an

insurance company on behalf of a client. The broker is unaware

that although his client is the registered owner of the property to be

insured, the insured has neglected to report that the home is being

used to house a catering business. This means that the client has

failed to disclose information on the insurance application.

(a) If you are the underwriter on this risk and it comes to your

attention that the insured is operating a catering business from

the home, what issues should you consider when you discover

the actual facts about the use of the insured home?